I will admit that calling for the privatization of the United States Postal Service (USPS) by free-market, limited-government policy people like me is hardly new. It’s a pretty standard viewpoint for people in positions like mine, sort of the libertarian equivalent of progressives calling for the government to fully fund public schools. But having said that, it really is time to privatize the post office.

In 1934, a federal law was passed that banned any entity except the USPS from placing items in any mailbox. That is the law that limited UPS and, later, FedEx, to parcel delivery. Even your neighbor is not allowed to put that party invitation in your mailbox. (If you are the type of person who reports neighbors who do so to the USPS, you probably don’t receive many party invitations in the first place.)

Until recently, the best defense of the post office monopoly was that, in all honesty, it worked fairly well. Sure, it was a monopoly that somehow managed to lose money each year, but at least the post office did a good job at its primary job of delivering the mail. You put a stamp on a piece of mail and it was delivered the next day if it was going nearby; two days later if it was going a little further; and three days if it was going a long distance. Big-picture concerns about USPS finances could be overlooked because stamps were cheap and the mail reliably went where it was supposed to go. That is, unfortunately, no longer the case.

A recent report on the post office by federal inspectors general found that, on average, on-time delivery of first-class mail has dropped 16 percent over the past year in the exact areas the post office has targeted for improvements. In St. Louis, over just two days in June at the downtown mail processing center, 2.6 million pieces of mail were delayed. There was no weather or mechanical reason for the delays, just bad operational management. Worst of all, sending mail in St. Louis puts your personal finances at risk. There have been multiple federal court convictions in the past year of St. Louis-area postal workers for stealing checks from the mail. The author knows two people who have had their identity stolen and finances ruined in this manner.

If the post office is no longer doing its main job well but is continuing to lose money, the entire system should be opened to competition. I’m well aware that FedEx won’t deliver a Christmas card for 78 cents (the current USPS rate), but if someone wants to pay more to make sure their Christmas card reaches Grandma before Christmas Day, why shouldn’t they be able to? UPS and FedEx should absolutely have a right to deliver first-class mail and place it into a mailbox where it will be better protected from rain and theft. (A reminder that you buy your own mailbox—the government doesn’t give it to you.)

USPS has long had a less-promoted role as a jobs program for political supporters and interest groups. When he was serving as a presidential advisor in the 1960s, former U.S. Senator Patrick Moynihan famously recommended changing to twice-a-day mail delivery, for the sole reason that it would allow the federal government to double the number of mail carriers.

It seems that, at present, the purpose of USPS is to deliver mostly junk mail in order to fund over $400 billion in postal-retiree pension and healthcare costs. Maintaining a failing monopoly to benefit those retirees may be politically popular, but it’s hardly good public policy. As the use of mail continues to decline, hard choices have to be made. Rural post offices shouldn’t be kept open just to appease rural interest groups, and urban post offices shouldn’t be protected against competition just to appease federal employee unions.

I would favor an attempt to sell the entire post office off to private operators. In 2025, the mail is no longer a necessary function of government (I will agree that it used to be). However, simply allowing other operators to compete against USPS by removing the mailbox monopoly would be a great step, too. You get to choose which phone, television, and internet services you use. You should have choice for your mail delivery, too.

The post Let’s Privatize the Post Office appeared first on Show-Me Institute.

Today, many Missourians receive electricity from state-approved monopoly utilities, which own and manage the generation, transmission, and distribution of electricity for their customers within exclusive service territories. Transitioning to a retail competition system would shift the ownership of generation from state-approved monopolies to private entities competing to sell power, while transmission and distribution would remain under utility control.

Responding to Change

The energy sector is in a state of flux, with several critical uncertainties lingering:

• How accurate are current energy demand forecasts?
• Will technological advancements from artificial intelligence significantly reduce energy consumption, and if so, how soon?
• What is the trajectory of electric vehicle adoption?
• How will the Trump administration’s regulatory reforms, such as recent changes at the Environment Protection Agency (EPA), impact the coal industry?
• Will the Nuclear Regulatory Commission (NRC) enact needed reform?

These unknowns highlight the challenges of relying on a regulated monopoly model, where long-term infrastructure planning is guided by government oversight rather than market signals. Competitive markets, on the other hand, offer greater adaptability. For example, the rise of hydraulic fracturing led to significantly lower natural gas prices over the last decade. Customers in competitive markets experienced the benefits of low gas prices sooner than customers in monopoly markets did.

Additionally, in a competitive market, private suppliers, not ratepayers, bear more financial risk of failed energy investments. If there is a significant cost overrun or if a project fails to come online, customers have less exposure as they can switch to another supplier or remain insulated through competitively priced default service (if they do not select a supplier).

Further Considerations

Despite the benefits of retail competition at the state level, other free-market reforms are needed. Energy regulation is complex, with overlapping layers of subsidies, taxes, and federal mandates distorting market forces. A truly free and competitive energy market would require broader regulatory reforms at the federal level to ensure private developers can better respond to market demand.

Another key consideration is the role of incumbent utilities in a competitive system. House Bill 417 requires utilities to divest their generation assets before retail choice begins, but it grants them discretion in how they do so. Utilities like Ameren could choose to sell their power plants to unaffiliated private developers or transfer them to a newly formed competitive affiliate, as long as the transaction occurs at fair market value and receives commission. As Missouri considers this transition, it will be important to define the appropriate role of former monopolies in a newly competitive market.

Retail competition is not a silver bullet, but it could introduce market forces to a historically insulated energy sector. Missouri policymakers ought to consider how implementing retail competition might work, and what potential barriers exist at both the state and federal levels.

The post Retail Competition in the Energy Market appeared first on Show-Me Institute.

There are many arguments for maintaining the current post office monopoly on mail, and economic efficiency isn’t one of them. Arguments include:

• The necessity of subsidizing rural life (especially really, really, rural life)
• General feelings about preserving “public goods,” as if getting a folder of advertisements delivered to your door each day is a “public good.”

And the one argument supporters of the post office usually don’t say out loud:

• Maintaining a small army of allied voters on the public payroll.

There are several ways the nation could go about privatizing the post office. The easiest would be to simply remove its monopoly protections against other companies delivering mail. That wouldn’t be privatization, but it would give people a choice to use other options for routine mail services.

Even with all the advantages the post office has over Fed Ex, UPS, etc., such as not paying taxes, exemption from parking regulations, and so on, it still manages to lose a lot of money each year.

Let’s face it. In the modern world, mail is no longer a necessary public service for the vast majority of people. For the people who still need it, there is no reason they should get subsidized service paid for (even if indirectly) by the rest of us. If you don’t want to adapt to technology or choose to live in outer Alaska, that’s fine, but you should pay more for your mail.

I write this at Christmas time, which is the only time that many people make use of the mail anymore. My family is sending out Christmas cards now, and we will pay the same price whether we mail a card to neighbors across the street or to friends and family in New York. Those price mandates and mail protections are absurd. I’d like us to sell the entire post office to the highest bidder, but short of that opening it up to competition is the next best thing.

The post Yes, We Should Privatize the Post Office appeared first on Show-Me Institute.

Throughout the United States, retail competition has helped to lower the electricity rates for residential, commercial, and industrial consumers.

Between 2008 and 2022, the 14 states with retail competition saw an inflation-adjusted 18.3 percent decrease in average price for all sectors—whereas the 35 monopoly states saw an average price increase of 3.6% in the same time period (these numbers include Washington, D.C., but not Alaska and Hawaii).

Let’s assume you have an electric bill of $200. In a state with retail competition, that bill would have dropped to $178. In a state with total monopoly, your bill on average would have risen to $211—a $33 difference.

Of the 23 states that saw the highest price increases in the 2008–2022 period, only one of them had retail competition (New Hampshire, which was 12th). The 14 retail competition states clustered near the bottom, with seven in the bottom ten.

Here’s an example of Texas’s retail competition website. When searching for a provider, consumers can use a number of different filters, including estimated electricity use, share of renewables, fixed rate versus variable rate (a fixed-rate provides a stable rate for the duration of one’s contract, while a variable rate fluctuates with market conditions), and company rating.

During the period from 2008 to 2022, Missouri saw the sixth-largest percentage increase in electric prices on average. While Missouri still has relatively low electricity prices, things are moving in the wrong direction. Shouldn’t the Show-Me State consider opening up the energy sector to market forces?

The post A Policy That Could Help Lower Missouri Electric Bills appeared first on Show-Me Institute.

The study grades each state from A through F on several factors relating to electricity market design and competition. On most of the important criteria in the study, Missouri gets few of the answers right. For example, while some Missouri utilities do participate in wholesale electricity markets, where grid operators select the lowest-cost electricity to meet demand, in no part of Missouri do customers get to choose their electric service from among competing providers. Moreover, monopoly utilities are not required to submit requests for proposals to find the lowest-cost new generation portfolio. Monopolies utilities can simply build the generation portfolio themselves, potentially at higher cost. This lack of a competitive market means that hardly any power plants in Missouri are owned and operated by non-monopoly utilities.

Not having a competitive market comes with its costs, and lately Missourians have been paying the price. For instance, customers of states that allow them to choose from competing retail electric service providers have seen their prices decrease 17 percent since 2008, whereas the average Missourian has seen his prices increase 17 percent during the same time period. Additionally, flexibility in choosing electric service providers appeals to businesses, as they can negotiate their own contracts and pursue their own electric generation goals.

If lawmakers want to reverse rising electricity prices in our state and create a more competitive and business-friendly environment, they don’t have to look far. Illinois received the second-highest grade in this study and has competitively structured electricity markets. As a result, its prices have decreased 13 percent since 2008. Based on these facts, shouldn’t lawmakers consider allowing greater competition in Missouri’s electricity markets?

The post Missouri Gets a D Grade in Electric Competition appeared first on Show-Me Institute.

Missourians have little recourse to deal with these rising costs. Missouri’s retail electric markets are monopolized, meaning that each Missourian only has one possible electric service provider.

But it doesn’t have to be this way. As I have written previously, thirteen states and the District of Columbia allow customers to choose between competing electric service providers. Looking at the time since competitive markets matured in 2008, the results have been quite encouraging, as shown in the graph below.

Source: Energy Information Administration

Missourians are losing ground when it comes to overall electric prices, too. In 2008, Missouri’s prices were quite low—43rd-highest overall electricity prices nationwide. Missouri’s prices now sit in the middle of the pack at 29th, due to the rapid price increases shown in the graph above.

Across every sector, competitive states are outperforming monopolized states—and especially Missouri—when it comes to lowering prices. Competition has helped make the electric service industry in those states more efficient and has passed on savings to customers. If lawmakers want to reduce the cost of living for Missourians while enhancing their economic freedom, they ought to consider embracing retail electric competition.

The post Why Missouri Should Embrace Retail Electric Competition in One Graph appeared first on Show-Me Institute.

Once upon a time (in 2008), Missouri had the lowest electricity prices in the Midwest at 6.84 cents per kilowatt hour, while our friends in Illinois paid the highest electricity prices in the region at 9.26 cents per kilowatt hour. (The Midwest is defined as Illinois, Indiana, Michigan, Ohio, Wisconsin, Iowa, Kansas, Minnesota, and Missouri.) Now, as of data from 2019 (the most recent data available), Illinoisans pay less than Missourians do (9.56 cents versus 9.68 cents) and have the second-lowest electricity prices in the Midwest, while Missouri’s electricity prices rose to the middle of the pack in the Midwest.

Moreover, when taking inflation into account, Illinois’ real electric prices decreased 13 percent, while Missouri’s increased by 19 percent—the third-fastest increase in the country between 2008 and 2019.

What gives?

The largest difference between electricity markets in Missouri and Illinois is that Illinois allows customers to choose between competing electric service providers, whereas Missouri still operates on a century-old monopoly model. In Illinois, customers have more than 150 electric service providers to choose from. Options for plans include fixed-rate, variable pricing, prepaid, or green energy plans. The pressures of competition ensure that electric providers operate more efficiently and are more responsive to customers.

In contrast, Missourians, wherever they live, have only one choice for an electric service provider—their government-sanctioned and regulated monopoly. Because there’s no competition, monopoly utilities don’t have an incentive to increase efficiency and don’t fear losing any business.

As the electricity price data above show, one of these systems has been working better, and it’s not Missouri’s. Lower electric prices mean households have more money left over for other needs. It also creates a more attractive environment for businesses. Missouri lawmakers can learn something from Illinois—pursuing competitive reforms to Missouri’s electricity market could be worthwhile.

The post Want Better Electricity Prices? Be More Like Illinois appeared first on Show-Me Institute.

What are promotional practices, and why does this matter?

Imagine that your power company wants to invest in an electric vehicle charging station in your area. They might have to bump up rates a bit in order to finance construction, but once the station was up and running it would be a win-win for electric vehicle owners and the utility.

But if you’re happy with your gas-powered car, it’s a different story. It’s not like you can just switch power companies. How is it fair for some of the money you pay for electricity every month to go towards a charging station that will make the power company more profitable, but won’t do anything at all for you?

Promotional practices are activities a utility undertakes to encourage some form of action by ratepayers. In the example above, the promotional practice is building the charging station, as the utility is trying to use it to encourage people to switch to electric vehicles. Or it could be something as straightforward as a gas company paying a cash bonus to anyone who replaces their electric stove with a gas stove.

Right now, the rules governing what expenses utilities can pass on to their customers are a mess. For instance, consider an educational program about energy efficiency that benefits all ratepayers. Such a campaign does not meet the current definition of “promotional practice.” Why not?

We have an opportunity to change the rules so that they make sense. If utility companies and their shareholders want to launch a promotion, they should be allowed to—as long as they, and not the ratepayers, foot the bill. Some of the red tape can even be removed along the way.

These and other matters relating to promotional practices are up for discussion at the Public Service Commission. The comments I submitted outline rule changes that would introduce more fairness and market discipline into the state’s utility monopoly system. You can read them here.

The post Show-Me Institute Submits Comments to Public Service Commission appeared first on Show-Me Institute.

Moving from a system . . . [that has] 1000 of something to one of something sounds a lot like a monopoly, and monopolies don’t always work in consumer interests.

The sheer cost of a Medicare for All program would dwarf our current federal spending levels and require massive new taxes on Americans. The Atlantic reports:

The Urban Institute, a center-left think tank highly respected among Democrats, is projecting that a plan similar to what [two candidates] are pushing would require $34 trillion in additional federal spending over its first decade in operation. That’s more than the federal government’s total cost over the coming decade for Social Security, Medicare, and Medicaid combined, according to the most recent Congressional Budget Office projections.

In recent history, only during the height of World War II has the federal government tried to increase taxes, as a share of the economy, as fast as would be required to offset the cost of a single-payer plan, federal figures show. There are “no analogous peacetime tax increases,” says Leonard Burman, a public-administration professor at Syracuse University and a former top tax official in both the Bill Clinton administration and at the CBO. Raising that much more tax revenue “is plausible in the sense that it is theoretically possible,” Burman told me. “But the revolution that would come along with it would get in the way.”

Health care providers, health insurers and pharmaceutical companies are not always “good guys” in our health care system, but they compete with one another, which serves consumer interests. Policymakers should go much further in compelling such competition and preventing these industries from leveraging government for their own interests. But Medicare for All goes in the very opposite direction—monopolizing control of our health care system, reducing choice and trusting government to provide these services instead.

It was a bad idea last year. And it is still a bad idea this year.

The post “Medicare for All” Remains a Terrible, Terrible Idea appeared first on Show-Me Institute.

But as happens with proposals like this, there is a tradeoff: other electricity users would ultimately pay more so that these plants could pay less. And it’s that tradeoff that promises to be hotly debated next week when the bill comes up for reconsideration.  Here is the 64-dollar question: rather than carving out exceptions to rules as they go along, why don’t policymakers first consider whether the rules themselves need to be changed for everyone? Such a reanalysis seems exceedingly appropriate as the Legislature focuses its energy on Missouri’s public utilities.  

As a general matter, utility customers across the state do not have a choice in who provides their power, and that impacts us all. If you could only subscribe to one cell phone company, the incentive for that company to compete for your business with better service and lower prices would be drastically reduced. The same is true of utility companies.  Why does Missouri allow the default electricity arrangement to be basically choiceless for the average Missouri customer? 

The state is part of a dwindling subset of utility regulators that still substantively curb utility choice in the United States. I would be more open to the notion that an energy customer is uniquely situated to require a break on its energy costs if Missouri was already operating in a market environment for utilities—one in which market forces could drive down the prices everyone pays. Whatever the eventual disposition of the smelter legislation in this special session, legislators need to have that serious reform discussion sooner, not later. And chances are good that discussion will begin in earnest next week.   

The post Break Missouri’s Utility Monopolies appeared first on Show-Me Institute.

Last year, Ameren filed for approval to install six charging stations between St. Louis and Jefferson City along 1-70 in order to alleviate the “range anxiety” EV drivers suffer with the current number of stations available.  Instead of approving or denying the request, the Missouri Public Service Commission (PSC) postponed its decision on the matter because it was unsure of whether it even had jurisdiction to regulate the emerging technology.

Some background: utilities such as electricity are often delivered to consumers through monopolies because of how expensive competing delivery infrastructure would be—it is rarely feasible for a startup to lay new pipes or string new wires.  To keep current monopolies in check, regulatory bodies (like the PSC) monitor and approve the prices utilities can charge to cover expenses while still protecting consumers from exorbitant prices.

Many private citizens and businesses already own and operate charging stations, so approving Ameren’s expansion into the market is controversial.  Daniel Hall, the PSC’s chairman, said “. . . it’s unclear whether or not it should be a regulated industry or whether it should be an open, unregulated, competitive market. . . . Where there is a competitive market, I’m not sure that that is a role for the commission.”

Hall’s uncertainty about the PSC’s role makes sense.  If the PSC were to approve Ameren’s project, it’s possible that all of Ameren customers (whether they own an electric vehicle of not) would have to chip in to cover the cost of construction for the new stations. 

Communities around the nation are debating whether the public-utility model would stifle competition, or if it is a necessary kick-start to EV adoption. Kansas’ regulatory body recently denied Kansas City Power & Light’s request to charge ratepayers for a $5.6 million charging station initiative, arguing the proposal was anti-competitive and that it would be unfair to require all ratepayers to subsidize a handful of EV drivers.   Meanwhile, Oregon has ruled (see p. 8) that utilities may own charging stations and cover costs through all ratepayers if they prove an area is in need and would not otherwise receive investment.

Ameren is proposing to construct stations in an area that is currently underserved, but electric cars are relatively new, and technological improvements could soon make them more prevalent than they are today. Missouri’s PSC has been confronted with a difficult decision, and they deserve credit for not blindly jumping into the unknown.  If a free-market model could improve customer choice and spur innovation, then we should be wary of expanding a monopoly where it may not be necessary.

The post Policymakers Wisely Look Before They Leap appeared first on Show-Me Institute.

CON laws limit where many health care facilities can open in Missouri, effectively carving out monopolies and oligopolies for incumbent providers. Sometimes the negative consequences of CON aren't obvious to patients because new providers don't even bother entering a CON health care market, so customers never see what they aren't getting. But for patients here in the Kansas City area, the difference between a CON state like Missouri and a non-CON state like Kansas is becoming a lot clearer as new, smaller health care operations are exploding in Kansas—but not here in Missouri.

The post Microhospitals Booming-But Not in Missouri, Thanks to Certificate of Need appeared first on Show-Me Institute.

Now just imagine that instead of coffee, the ballooning cost was for a vital medicine hundreds of thousands of people might need in an emergency situation. This is no longer a hypothetical scenario, but the current state of affairs of Mylan, a major pharmaceutical company, and its product, the EpiPen.

The EpiPen is an epinephrine auto-injector (EAI) used to treat severe allergic reactions. In 2007 it cost roughly $100, but today it costs $608. And although Mylan has invested in improvements to their product, critics don’t think the 500% price increase is justified. They think Mylan is just a case study in corporate greed.

But while it’s convenient to blame Mylan for the price surge, that doesn’t go quite deep enough. Mylan is just like any other for-profit business trying to make the highest profit it can. What’s to blame is the near monopoly (98% market share) Mylan has been granted on the EAI market.  

Just this year, a potential competitor to Mylan, Teva, unexpectedly failed to receive approval from the FDA for a generic EAI. And last year, another EAI was removed from the market by the FDA for minor dosage issues. (Note: Mylan just announced it will introduce a generic EAI, although it will cost $300.) Moreover, in 2013, the School Access to Emergency Epinephrine Act, which incentivized schools to stockpile EpiPens, was signed into law.

In short, regulations have made purchasing an EAI besides the EpiPen nearly impossible. Predictably, in the absence of any competition, EpiPen prices rose.

So regardless of whether Mylan’s prices are “unfair,” the real question to ask is this: What is the framework in which private enterprises like Mylan best serve the needs of ordinary people? The answer is a free and competitive market—where barriers to entry are reasonable, regulations make sense, and preferential government treatment is non-existent. Unfortunately, the EAI market is nothing like this.

Perhaps the current EpiPen outrage will make policymakers ask themselves: Is our healthcare market open and competitive? Are our healthcare regulations reasonable and fair? Should we cautiously deregulate the pharmaceutical industry? 

The post The Root Cause of Mylan’s “Evil” appeared first on Show-Me Institute.

For years, hospital executives have defended these prices saying it’s about quality, or that they see sicker patients, or lots of folks on Medicare.

“That’s just not true,” said co-author Yale economist Zack Cooper.

Cooper said the team, including John Van Reenen from the London School of Economics and the University of Pennsylvania’s Stuart Craig, controlled for all those factors. And Cooper said market power matters more than the rest….

Change starts, says Cooper, when people who buy the MRIs and the C-sections can simply see real prices. And change may happen when those same people negotiate next year’s deals knowing what they know now.

You can find the full report here. Its implications are straightforward. For one, a hospital that holds and can maintain monopoly control over a health care in its region can charge higher prices than if it had competition. For another, concealing the prices of health care services serves to fatten providers' wallets. Without readily available prices, it is harder for patients to determine whether they're being overcharged. That was true before Obamacare was passed… and has continued long after Obamacare was implemented. The problem in health care is not the free market. The problem is the lack of a free market in health care.

Market reforms like price transparency are important tools to make health care in this country better, less expensive, and more accessible. Rather than go farther down the hole of failed government-run health care, we need to move toward freeing our health care system to make sure that patients' needs—both their health needs and their financial needs—are in the center of the system. Price transparency would be a step in the right direction after far too many steps in the wrong.

The post Study Finds Health Care Price Transparency Should Be a Top Policy Priority appeared first on Show-Me Institute.

With the stadium expected to cost the public around $400 million, one might have hoped that planners would dedicate the $158 million to paying off the public portion of stadium debt. After all, economists agree that stadiums do not generate much return in terms of development of tax revenue, so the lower the public subsidy, the better. Unfortunately, the benefits from the sale of naming rights, like the benefits of the stadium in general, will likely redound to the NFL and Rams ownership, not Missouri residents.

Stadium backers fear that $400 million in public dollars might not be enough to keep the Rams in town, so the stadium task force wants to sweeten the deal for the Rams, or whatever team is willing to play in Saint Louis. As the Post-Dispatch reported:

“Regional leaders here expect it could be an enticing carrot for a team owner seeking to defray his own portion of stadium construction costs…It doesn’t mean the state or city will have to pay less for the stadium, Peacock [the head of the stadium task force] emphasized. “It provides certainty around the project, more than anything…”

This is what happened when Saint Louis lured the Rams two decades ago, turning over 75% of naming rights proceeds to the Rams (along with personal seat licenses, the relocation fee, etc.), even though the Edward Jones Dome was built entirely at the public’s expense.

The use of naming rights revenue to placate the NFL, rather than Missouri residents, makes some sense. After all, the governor and the Missouri Development Finance Board plan to unilaterally spend around $300 million in state funds on the stadium, without the vote of the legislature or the people. As for the city, an ordinance requiring a vote on public financing for stadium projects was struck down in court (but the mayor says they’ll get a vote on the next stadium). The only group left that might vote no, and can vote no, is NFL ownership.

 As University of Chicago economist Allen Sanderson said, talking about the riverfront stadium plan:

“The NFL, first of all, is a monopolist. And monopolists don’t leave much money on table.”

 Missourians might soon have the disadvantage of rediscovering just how little money that will be. 

The post Stadium Planners Sweeten the Deal . . . for Billionaires appeared first on Show-Me Institute.

Suppose you’re a firefighter in the Kansas City region. You’ve worked there a number of years and have done a good job. One day your spouse gets a job offer in Saint Louis County and you consider moving your family across the state. If you want to continue in your profession when you get to the county, you’re going to need to go back to school first; Saint Louis County only allows fire departments to hire firefighters who have been through the Saint Louis County Fire Academy.

The  academy only accepts about 40 applicants each session. Applicants who do not already have a job lined up are selected by lottery. This ensures that it’s very hard to become a county firefighter unless you already have a connection to the county fire industry.

Fire departments outside of Saint Louis County do not share this problem. The Saint Louis Fire Department and fire departments in Saint Charles and Jefferson counties hire firefighters who have been through any state-certified fire academy.

Other academies, such as Saint Louis City’s fire academy, also typically have more applicants than they can accept. Rather than give preference to some applicants and send the rest through a lottery, the city academy accepts students based on an entrance exam.

At very least, Saint Louis County fire departments should be able to hire firefighters who already work in Missouri without forcing them to pay for and attend another fire training program. The best solution would be to end the Saint Louis County Fire Academy’s monopoly on fire training and allow fire departments to hire firefighters who have attended any state-certified training program.

The post Saint Louis County Would Be Safer With a Rational Policy for Hiring Firefighters appeared first on Show-Me Institute.

According to some, ending competition for convention catering business would increase quality:

An exclusive food provider, according to O’Neal, would help the convention center ensure quality control because “with one vendor, the building can control quality better, and that’s what people remember about a building.”

City Manager Troy Schulte agrees. Even if the city weren’t negotiating with Hyatt, Schulte said, he was thinking about moving toward a single caterer. He said the city has received some complaints about catering, which he declined to specify. Schulte said a single provider would make quality control better.

You read that right. Some Kansas City leaders apparently think that reducing choice increases quality. (By the way, Aramark has an exclusive catering agreement at Kauffman Stadium, and they haven’t been doing so well regarding quality.)

This flawed thinking isn’t limited to the catering contract, according to the Memorandum of Understanding. Neither the initial award of catering nor the award of the construction contract for the hotel are to be competitively bid. The city apparently just plans to give those contracts to Hyatt and J.E. Dunn respectively without making sure their bids are the best or the cheapest.

Is it any wonder that city finances are such a mess when even the most basic economic principles of choice and competition are disregarded?

The post Back in the USSR appeared first on Show-Me Institute.

Late last month, founding president and chief operating officer of the Children’s Scholarship Fund James Courtovich wrote an op-ed in the Wall-Street Journal titled “What Uber and School Choice Have in Common.” He said:

When we began the project [Children’s Scholarship Fund] in 1998, teachers, union leaders and their political benefactors said choice was a threat, much as cabdrivers say now. But as [Ted] Forstmann used to say, “Monopolies invariably produce bad products at high prices.” The 1.3 million parents who applied for the scholarships illustrated the tremendous demand for alternatives.

I reread this article after my trip to Washington, D.C., where I took my first Uber and Lyft rides. Reflecting on my positive experience with the taxicab alternatives, i.e., five-dollar fare, I realized—I’m not used to having choice.

In the Show-Me State, it is the status quo to be educated within your zip code. It is also the status quo to pay $40 for a 10-mile cab ride. Saint Louis and Kansas City are two of the largest metropolitan areas to prevent Uber and Lyft from operating their ridesharing services; and there are no private school choice programs in the state. Is Missouri choice-resistant?

As Courtovich suggested, there’s a parallel between the St. Louis Metropolitan Taxicab Commission (MTC) and Missouri’s school choice critics. The MTC claims to protect rider safety, maintaining the balance between cab supply and demand. School choice opponents claim voucher programs will “destabilize” public education, that choice and competition have no place in education.

The MTC and school choice critics are utterly afraid of change, but keeping the status quo has consequences. Children are trapped in low-performing schools, and cab fare is high. Missouri should follow the lead of states that have embraced choice in any context, because as Uber’s tagline suggests, “Choice is a beautiful thing.”

The post What Uber and School Choice Have in Common: In Missouri appeared first on Show-Me Institute.

It does not take a Ph.D. in economics to realize this is a foolish regulation. In the absence of proper competitive incentives, the other lemonade stands will continue serving sour lemonade.

Now replace the words “lemonade stand” with “three-bed hospital” and “your eight-year-old self” with “Paul McKee,” and you have a real-life situation.

McKee, a well-known real estate developer in the area, has been working on a project to renovate a portion of North Saint Louis City. On July 9, he unveiled a plan to establish a three-bed urgent care facility within the redevelopment area. According to state law, a certificate of need (CON) must be obtained in order to open a new hospital with costs of at least $1 million. It appears his proposal meets this threshold. However, requiring McKee to obtain a CON to open a small urgent care hospital in an underserved and impoverished area is a totally unnecessary government regulation.

CON programs initially were implemented in order to prevent the duplication of health services in a given geographic area, thereby controlling costs. The reasoning was that an excess supply of medical services would compel hospitals to increase prices in order to cover the high fixed costs associated with medical treatment.

There have been many different studies on how CON regulations impact the cost of care. A thorough survey of the relevant data reveals that CON regulations do very little, if anything, to control the overall cost of care. Furthermore, with respect to certain procedures, CON regulations have been shown to limit patient choice, resulting in worse care delivered from less capable doctors. Additionally, these regulations can create an inefficient market structure and grant existing hospitals monopolies over certain regions.

Some may even argue that McKee will attempt to use the regulatory program to prevent competitors from entering the market in North Saint Louis. Given CON rules, if his project is approved, it likely will be more difficult for new medical facilities to open nearby. But doesn’t the potential to abuse and use CON regulations to create a monopoly give all the more reason to eliminate them?

Additionally, Missouri’s CON program delays groundbreaking on new hospitals. McKee said he intends to submit his proposal by Aug. 22 and, in all likelihood, his application will not be reviewed until early November.

Christien West is an intern at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Delays and Blockades: Certificate of Need in Saint Louis appeared first on Show-Me Institute.

A 2004 report by the U.S. Department of Justice and Federal Trade Commission found that CON programs “pose serious anticompetitive risks that usually outweigh their purported economic benefits.” So far, I have written about how CON regulations can limit access to care and have been shown to not effectively control costs. CON regulations have the potential to stifle competition and grant existing hospitals monopolies over certain regions. Some existing hospitals may even attempt to use these regulations to prevent competition from entering the market.

How does this play out in Missouri?

In the past, any time a new hospital wanted to open up in Missouri, it had to apply for a CON – irrespective of its size and cost. A revision to Missouri’s CON rules changed the criteria for review from every new hospital to every new hospital whose cost is at least $1 million.

In April 2010, Patients First Community Hospital expressed its intent to build a small hospital in Saint Louis County that did not meet the new threshold for certificate of need review. Shortly thereafter, a regional rival, St. John’s Mercy Health System, filed a lawsuit against the Missouri Health Facilities Review Committee and Patients First. St. John’s challenged the legitimacy of the new $1 million amendment and construction of the new hospital. In 2012, the Missouri Supreme Court ruled that the new criteria for review was perfectly legal, thus giving Patient’s First the green light for the project.

Despite the ruling against St. John’s, this is an excellent example of a hospital using the legal system in an attempt to stomp out the competition, all under the pretense of CON regulation. It took about two years for Patients First to have its plan approved. These sorts of delays can deprive patients of new, much-needed medical facilities.

The state should not allow such an environment to exist.

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